The influence of internet availability on economic growth across 122 underdeveloped regions in Indonesia from 2020 to 2025 was thoroughly examined by Indra Gunawan from Universitas Kristen Indonesia. This research is crucial for understanding how digital infrastructure can act as a catalyst for economic equalization and overcome regional disparities in various peripheral areas.
Economic inequality between urban centers and underdeveloped regions in Indonesia has traditionally been driven by weak physical infrastructure and low institutional capacity. Although expanding internet access promises a strategic solution, empirical evidence regarding its actual economic payoffs in resource-constrained regions previously remained fragmented.
This study applied a quantitative approach using secondary panel data from all 122 official underdeveloped districts in Indonesia over a six-year observation period. By analyzing household internet penetration rates alongside supporting variables such as the Human Capital Index (IPM) and government capital expenditure, this research mapped the direct relationship of digitalization to regional gross domestic product.
The main findings of this study reveal several key points:
- Boost in Economic Growth: Internet availability proved to provide a positive and significant influence on regional economic growth with a regression coefficient of 0.142.
- Role of Human Capital Quality: The Human Capital Index (IPM) contributed a significant positive effect with a coefficient of 0.085, indicating that education and skills strengthen workforce productivity.
- Impact of Government Capital Expenditure: Government capital expenditure also boosted regional economic performance with a coefficient of 0.031 through the development of supporting public infrastructure.
- Digital Literacy Challenges: Digital dividends in peripheral areas remain constrained by low levels of digital literacy among local communities.
According to Indra Gunawan from Universitas Kristen Indonesia, digital access enhancement must be accompanied by targeted digital literacy programs so that communities can optimize technology for productive activities. For micro, small, and medium-sized enterprises (MSMEs) in underdeveloped regions, the internet cuts transaction costs, expands market reach, and breaks dependence on traditional intermediaries. Therefore, public policy and regional budget allocations need to be focused on strengthening digital ecosystems and community skill training to create inclusive and sustainable economic growth.
Author Profile:
Indra Gunawan, S.E., M.Si.: Researcher and academic at the Department of Management, Universitas Kristen Indonesia, Jakarta, with a focus on regional economics, territorial development, and digital infrastructure.
Research Source:
Gunawan, I. (2026). The Impact of Internet Availability on Economic Growth in Indonesia's Underdeveloped Regions. Indonesian Journal of Business Analytics (IJBA), 6(4), 875–889.
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